Restructuring Global Insight - Strategies of investing in distressed debt, and more

Restructuring e-Newsletter - Global Insight

Welcome to our 20th edition of Global Insight. In the last edition we concentrated on legislative reform around the world. We continue that theme this month with articles concerning new safe harbour provisions in Australia and laws to facilitate the better coordination of corporate group insolvencies in Germany.

The winds of change blow from many directions: this month, we also consider the potential long-term consequences of defensive strategies in the European leveraged loan market and the effect of the US Supreme Court's decision in Jevic on structured dismissals which seek to deviate from the ordinary priority of payment rules.

We hope you enjoy these articles and, as ever, we welcome your comments and feedback.

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In this issue

Where a corporate borrower defaults on its debt terms, distressed debt investors are often presented with opportunities to acquire the debt at a discount. The strategy of investing in distressed debt presents investors with a number of opportunities.

Long-awaited law reform to bring Australia's insolvency regime into step with many of its trading counterparts is slated to be enacted in the second half of 2017. The text of the law is currently before parliament for debate.

Germany's major legal reform aiming to facilitate group insolvencies is in effect, allowing insolvency proceedings over companies within a corporate group to be concentrated at a single German insolvency court and/or to be administered by one insolvency administrator.

The US Supreme Court holds that a bankruptcy court may not approve a structured dismissal of a chapter 11 case that provides for distributions that fail to follow the standard priority rules, unless the affected creditors consent to such treatment.